The Bridge That Almost Broke Us
There are deals that teach you something useful and deals that teach you something essential.
This one falls firmly into the second category.
It is a story about a project that, by almost every measure, went well. The purchase was smooth. The refurbishment was completed. An unexpected buyer appeared and made an offer on the spot. The numbers worked.
And then the clock ran out.
The Project
In September 2016 we purchased what would turn out to be our last personal development project to date. A semi-detached period property that had been converted into six flats, three with one bedroom and three with two bedrooms, with parking and outside space to the rear. The bank had repossessed it from the previous owners and it was sitting empty.
The plan was straightforward. Buy, refurbish, refinance, and rent. A BRRR strategy using a combination of personal cash and private bridging finance for the initial purchase, then our own funds to cover the refurbishment, and finally a refinance on completion to pull most of our cash back out and hold the building for rental income going forward.
We had been working with a property investor mentor during this period. Someone with experience in the blocks of flats market in the area we were buying, who had guided us through the structure of the deal and the financing arrangements.
As it turned out, some of that guidance was not as solid as it appeared. But we did not know that yet.
The Unexpected Offer
A few weeks into the refurbishment, something unexpected happened.
A supported living care company operating in the area approached us to ask whether we knew of any blocks of flats that might be available for purchase. I mentioned that we had a project underway that might suit them, although our intention had been to hold it on completion rather than sell.
They asked to see it. We arranged a viewing.
They loved it. The building worked for them, the individual units suited their requirements, and the location was right. They made an offer on the spot and followed it up in writing the same day. The only condition was a small number of alterations to the building to suit their specific use.
We accepted. We agreed to complete the alterations before handover, and what had started as a project we planned to hold had become a sale.
It felt like a significant stroke of luck. In many ways it was. What we did not yet fully appreciate was how that sale would interact with a ticking clock we had already set in motion.
The Clock
The bridging finance we had taken out for the purchase had been arranged on the advice of our mentor. A fixed loan period of three months, running to the end of December 2016. Our mentor had been clear that this was ample time to complete everything and repay the loan within the agreed window.
What bridging finance means in practice, for anyone who has not used it, is this. It is short term borrowing, typically used to fund a property purchase quickly when a conventional mortgage is not suitable or not available in time. It is more expensive than standard finance and it comes with a hard deadline. Miss that deadline and significant penalty charges kick in, eating directly into your profit.
Three months felt reasonable. The refurbishment was manageable, the buyer was keen, and everything appeared to be moving in the right direction.
Then the weather turned.
November Rain and a December Deadline
The autumn of 2016 was wet and windy, and the outside works on the building slowed considerably as a result. Progress was not lost entirely, but the schedule tightened.
By the end of November, everything was complete. The buyer inspected the building and each individual unit, signed off on the works, and confirmed they were satisfied. The alterations had been made. The building was ready.
What we also learned around this time was that the care company itself was not the buyer. The purchase was being made by a private investor who acquired properties and leased them back to the care company for their use. This investor was simultaneously buying multiple sites for the same company, which meant their solicitor was managing a number of transactions at once.
With our bridging deadline at the end of December, we needed exchange and completion before the Christmas break. Both sets of solicitors confirmed in mid-December that everything was on track. A date was set.
That date came and went.
The buyer's solicitor informed us that his client had gone on holiday and would not be back until the New Year. Completion would take place in January.
A Very Difficult Christmas
There are not many ways to dress this up. We spent Christmas that year stressed, worried, and running financial scenarios in our heads.
The question was not just when completion would happen. It was whether it would happen at all, and what the delay was going to cost us if the buyer returned from holiday and the deal fell apart entirely.
Every day beyond the end of December meant penalty charges on the bridging loan. Costs we had not planned for, eating into a profit we had worked months to build.
Completion finally took place in the last week of January 2018. Four weeks of penalty charges. Thousands of pounds gone from the bottom line of a deal that had otherwise gone well.
What We Learned
The project taught us three things that have shaped every decision we have made about financing and mentorship since.
The weather is a variable, not a given.
Outside works are exposed to conditions nobody can fully predict. Any timeline that assumes smooth progress on exterior refurbishment in an autumn or winter project is a timeline that needs more buffer built into it. We underestimated how quickly a run of bad weather could compress a schedule that had looked entirely manageable.
Bridging finance needs a longer runway than you think.
Three months felt like enough. In hindsight, it was not. The lesson is not that bridging finance is a bad tool, it is an extremely useful one in the right circumstances.
The lesson is that the agreed period needs to account not just for your own timeline but for every other party in the chain, including a buyer's solicitor whose client might decide to go on holiday in December. A longer bridging period costs more to arrange but far less than penalty charges on a deal that slips.
Mentors are not always the experts they present themselves as.
We trusted the advice on the bridging structure because we had no particular reason not to. Our mentor had experience in this market and presented the arrangement with confidence. What this experience revealed was that confidence and expertise are not the same thing.
A mentor's guidance, however well-intentioned, needs to be tested against independent advice, particularly on financing decisions where the consequences of getting it wrong are quantifiable and immediate.
The Project We Still Think About
The building was a good one. The sale completed. The buyer was satisfied. By most measures, the project was a success.
But the Christmas we spent running worst-case calculations at the kitchen table, and the thousands of pounds we handed over in penalty charges that should never have been necessary, have stayed with us considerably longer than the profit did.
If you are using bridging finance on any project, build in more time than you think you need. Assume something will take longer than planned, because something always does. And if a mentor is advising you on the structure of that finance, get a second opinion before you sign anything.
The bridge was not far enough. Make sure yours is.
Really happy with how this one came together — the Christmas detail earns its space now, and the mentor lesson lands as a genuinely important point rather than just a complaint. Ready for the quote, email and community versions when you are.
